Answers Archive

Transfer of Prior non Capital loss

Your spouse can rollover assets / shares at their cost amount to you (automatic rollover). When you sell the assets / shares, you can claim the capital loss.

withholding Tax On Dividends Paid By A US Company To A Canadian Parent Company (FAPI) Part 3

Forms 1042, 1042-S and 1042-T must be filed by March 15 of the year following the calendar year in which the dividend was paid. The deadline for payment is 15 days following the month in which the dividend payment was made.

property gift from india

If the property belongs to your mother and she is the beneficial owner of the property, then the after-tax sales proceeds can be paid to you in Canada, and you will not have to pay tax on the amount received. Your mother will be responsible for paying any capital gains tax to the Indian Tax … Continue reading

Best tax savings options for high earning spouse.

Hi Anu, Here are some tax tips for a high-income earning spouse: 1. Contribute to a spousal RRSP. RRSP contributions are deductible, and upon retirement, your lower-income spouse will include the withdrawals in his/her income. 2. Maximize your TFSA contributions. Income earned in a TFSA is tax-free, and withdrawals are not taxable. 3. Make a … Continue reading

Cash withdrawal

First, repay any shareholder debt owing. This is tax-free and the repayment is recorded as a reduction of the shareholder debt. Second, pay a taxable dividend (other than eligible) to the shareholders to the extent the company has any retained earnings. A dividend is reported on a T5 slip and is treated as a reduction … Continue reading

Small business (CCPC) shareholder restructuring/shares transfer

If your elderly parents meet the requirements, then yes, your elderly parents can claim the lifetime capital gains exemption. Consider purchasing their shares now, in order to trigger a gain, which can be offset with the exemption. In addition, creating a trust where your children are beneficiaries is very helpful to reduce estate taxes payable … Continue reading

HST Paid on Account receivable for 2019. Do I need to deduct the amont from q1 – 2020 for HST payment?

HST is payable on accounts receivable in the 4th quarter. However, you do not have to pay HST again when the accounts receivable is collected. Do not subtract Q4 HST paid on accounts receivable from Q1 in the subsequent year.

principal residence exemption

If you have not claimed CCA, and there is no structural change when the basement was built, then you can claim the principal residence exemption on the entire gain on the sale of your primary residence, assuming that you lived in the property for all of the years you owned it. If there’s an audit, … Continue reading

Can I pay my spouse a salary for 2020?

It’s too late to pay a salary to your spouse. Salary payments cannot be back-dated. If you are the sole owner, you will have to pay tax on the income earned, even though you are one household.

Any issues With using personal savings to buy real estate under Company name?

You can use your personal savings to purchase US real estate under the name of the company, assuming that the company will be on title to the property. The CRA doesn’t have an issue with this arrangement.

non Resident canadian gift to resident canadian kid

You do not have to pay tax on the gift received.

On which fiscal year do we expense vaction paid due on year-end bonus?

They are accrued and deducted in the previous fiscal period.

Should I take cash out of business ban account and incorporate another business and buy an investment rental?

Follow these steps: 1. Incorporate a company to purchase real estate (e.g. Real Estate Inc.) 2. Make a tax-free loan (e.g. $150,000) from your existing operating corporation to Real Estate Inc. 3. Charge 1% interest on the loan to be paid by December 31 of each year 4. Real Estate Inc. will use the loan … Continue reading

How much is foreign Tax Credit for house sold in India

The foreign tax credit will be the lesser of (a) the taxes paid in India on the capital gain and (b) the taxes payable in Canada on the capital gain. The highest capital gains tax rate in Canada is 27% (approximately), so you should receive a foreign tax credit of 20%, leaving a balance owing … Continue reading

Buying Real estate through partnership

From a tax perspective, it is possible for work permit holders living in Canada and PR card-holders to invest in Canadian real estate. Before purchasing, make sure that all individuals qualify for a mortgage. It’s best for the two investors to enter into a joint venture agreement. Note: In Ontario, the foreign buyer’s tax (15% … Continue reading

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